On 1 October 2026, U.S. federal authorities arrested Greg Lui, 38, CEO of Earthmade Computer Inc. in City of Industry, California, accused of a scheme to smuggle Nvidia export-controlled servers worth more than $300 million into China. The Justice Department and coverage from Ars Technica, The Register and The Guardian placed the indictment around that date.
Prosecutors say Lui used false paperwork to mask shipments he allegedly knew were ultimately bound for China, conspiring with freight forwarders in Malaysia and Singapore. Chips cited include A100 and H100 GPUs — not Nvidia’s most advanced, but capable of training large models — plus other restricted accelerators named in the filing.
The alleged scheme ran from October 2023 through August 2026. Emails and bank records, the DOJ says, show orders presented as Malaysia or Singapore destinations that then diverted to Hong Kong and firms in Hangzhou, which The Wall Street Journal has described as a Chinese AI hub.
One cited example: an order for 70 servers with restricted GPUs declared for Malaysia; after a purchase order for 27 servers for about $7.6 million to a U.S. manufacturer, a co-conspirator allegedly told a Malaysian official that all 27 went to China. Another shipment of 92 servers allegedly routed through Singapore, Malaysia and Hong Kong.
In a 2024 case, Lui allegedly submitted fraudulent documentation from a fake buyer whose CEO was listed as “Jackie Lui,” after earlier purchasing a third party’s identity documents to run the scheme. That same year, the indictment says, the firm received more than $176 million tied to the smuggling, with traces in Bank of America and JP Morgan accounts.
Lui faces charges of conspiring to violate the Export Control Reform Act and Export Administration Regulations, plus smuggling and money laundering. Maximum penalties cited reach 20 years for conspiracy or money laundering and 10 years for smuggling. The DOJ seeks to seize funds gained through the scheme.
The arrest joins other probes of chip diversion into China, including cases involving personnel linked to server vendors. Nvidia has shifted from denying smuggling red flags to downplaying diverted volume: a spokesperson told Bloomberg that less than half of one percent of its products had allegedly been diverted — “a drop in the bucket” versus China’s domestic compute.
Officials and experts, however, say the black market is hard to measure and likely larger than reported. Bloomberg investigations have questioned “blind spots” in due diligence on shipments to facilities in Thailand, Malaysia and Singapore that did not appear able to house ordered volumes.
For U.S. industrial policy, the case strengthens the argument that AI-accelerator export controls are only as strong as compliance along the logistics chain. Trump has generally preferred industry self-policing; the DOJ, meanwhile, continues to use criminal law when documented schemes appear.
China, for its part, is accelerating domestic alternatives — with Huawei central to Nvidia’s narrative — while demand for U.S. silicon persists in opaque data centers. Each visible arrest raises perceived risk for middlemen but does not guarantee routes close.
Neural Pulse highlights public-filing dates and figures: more than $300 million, A100/H100, Malaysia-Singapore route, October 2023–August 2026 window, arrest around 1 October 2026. Lui is presumed innocent until judged; the account above summarizes the accusation, not a verdict.
Firms that buy or resell high-performance servers should review end-customer KYC and consistency between declared data-center capacity and order volume. The cost of a compliance miss, this case shows, can be measured in decades of prison exposure and asset forfeiture.
